Christopher A. Combs
question: I am a designated broker for a small real estate company. I know that I have to supervise all the real estate agents in the office. One of our real estate agents recently got into an argument with another real estate agent at an open house. There was also talk of him filing a police report. If this other agent files a lawsuit against our agent, will our real estate broker be liable?
answer: Probably not. The Arizona Court of Appeals has ruled that a real estate agent cannot be held liable for the negligence of a real estate agent who caused a fatal car accident after driving away from a listing appointment.
The decision states that “the focus of the broker’s responsibility…is the content and documentation of the real estate transaction itself; and the driving of the salesperson has nothing to do with the documentation of the transaction.”
The bottom line? Real estate agents are only liable to real estate agents specifically acting as real estate agents (e.g. failing to disclose roof leaks or misrepresenting the square footage of a house).
Note: Most real estate agents enter into an independent contractor agreement with a brokerage firm rather than an employment contract. Under the independent contractor agreement, the real estate broker is not responsible for the real estate agent’s unemployment taxes, workers’ compensation, or employment taxes/withholding taxes. However, real estate agents are still liable for the real estate agent’s negligence in the course of their business.
Oral lease modification:Our landlord does not honor verbal changes to our rental agreement. What can we do?
Contact real estate attorney Christopher A. Combs at azrep@combslawgroup.com.